Stanley Fischer Pleas For More Fiscal Policy Stimulus

By Czarina Ara Lasco

Nov 16, 2016 06:00 AM EST

According to Fischer during the first public commentaries by a senior federal authority after the overwhelming victory of Donald Trump in the Presidential race last week, he and several central bankers have declared that "it would be useful to have a more expansionary fiscal policy."

Fischer, who spoke through a video link at a central bank conference which happened in Santiago Chile, the Vice Chair of the Federal Reserve said that the stimulus that enhances the economy will "ease the task of monetary policy."

Should the US economy need to ask for help, the Federal does not have enough choice to move into as its interest rates are currently almost close to zero.

For some time, the officials of the Federal have lamented the lack of support for the states' fiscal policy. They claimed that the reliance of the monetary policy alone to strengthen the economy's growth has been excessive.

Fischer has made it a point that there is "more than one policy tool. As of the present, there is a current fiscal policy that has been utilized and that, considering the circumstances at the moment, said monetary policy could be used for only a few reasons.

"We'll have to see what happens," Fischer said.

Aside from blatantly condemning the Federal Reserve, President-elect Donald Trump has also vowed to improve the economic growth of the United States and produce high-paying jobs through a massive program for infrastructure development which will subsequently increase the demand for manufacturing.

Earlier, President Barack Obama has held that Trump's plan could hardly get support from the Congress. While the House and the Senate are both dominated by the Democratic Party, Trump might as well realize what President Obama talks about.

Meanwhile, on Trump's unexpected victory, Fischer has initially refused to speak when he was asked about the movements in the stock market. However, Fischer later said, "Of course we will watch events and depending on how the markets turn out and how the economy turns out, we will adjust our policy as necessary. US policy rates are likely to increase more slowly, and by a lower cumulative amount, than in past episodes of US monetary tightening."

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